Produced in partnership with Marsh McLennan and Zurich Insurance Group, the report draws on the views of over 1,200 global risk experts, policymakers and industry leaders.
The global pandemic and war in Europe have put energy, inflation, food and security crises front of mind. The report found that these create follow-on risks that will dominate the next two years: the risk of recession; growing debt distress; a continued cost of living crisis; polarised societies enabled by disinformation and misinformation; a hiatus on rapid climate action; and zero-sum geo-economic warfare.
Managing director of the WEF, Saadia Zahidi, said: “The short-term risk landscape is dominated by energy, food, debt and disasters. Those that are already the most vulnerable are suffering – and in the face of multiple crises, those who qualify as vulnerable are rapidly expanding, in rich and poor countries alike.”
Jaimie Sach, chief risk officer, Zurich Australia & New Zealand, said: “In the near term, cost of living is the key issue in Australia and around the world, particularly given the impact it has on economic inequality and general social and political cohesion.
“Over the longer term, it’s not surprising that the top 10 risks are dominated by environmental concerns. Of particular interest in an Australian context is the increasing risk around resource competition, specifically in critical ‘new-economy’ minerals where we are a key global supplier. This will be a significant area of future economic and geopolitical interest.”
Matching last year’s report, respondents ranked environmental risks, including climate action failure, extreme weather and biodiversity loss, as the most severe globally over a 10-year horizon.
John Scott, head of sustainability risk, Zurich Insurance Group, said: “The interplay between climate change impacts, biodiversity loss, food security and natural resource consumption is a dangerous cocktail.
“Without significant policy change or investments, this mix will accelerate ecosystem collapse, threaten food supplies, amplify the impacts of natural disasters and limit further climate mitigation progress.
“If we speed up action, there is still an opportunity by the end of the decade to achieve a 1.5-degree trajectory and address the nature emergency. Recent progress in the deployment of renewable energy technologies and electric vehicles gives us good reasons to be optimistic.”
According to Carolina Klint, risk management leader, continental Europe at Marsh, the economic constraints in the year ahead will hamper countries’ and organisations’ resilience efforts.
“Faced with the most difficult geo-economic conditions in a generation, companies should focus not just on navigating near-term concerns but also on developing strategies that will position them well for longer-term risks and structural change,” she said.
